DSKnowledge is a leading provider of Knowledge Management (KM) software for enterprises. The company modernizes and transforms legacy data, information and content elements in enterprises into one knowledge management repository. The company offers proven solutions for enterprises such as financial institutions, logistics companies, the public sector, telecom operators, cable and satellite television broadcasters, healthcare, hi-tech organizations and more. By improving the management and delivery of knowledge, improving customer service, enhancing marketing efforts and reducing operating costs, DSKnowledge has become an invaluable solution that is used by enterprises with thousands of users. The product enables an enterprise to dramatically improve the efficiency and effectiveness of employees with a rapid deployment cycle. In addition, the product improves the end customers' service level by a web enabled self service interface.

"The addition of Knowledge Management modernization products to our offering establishes BluePhoenix as an enterprise wide modernization company. We are excited to expand our portfolio of solutions as it enables us to modernize enterprises starting from infrastructure components such as platforms and databases and ending with the modernization of the knowledge base. In addition, this offering will enable us to offer solutions to the marketing, IT and customer service departments creating a unique value proposition," said Yaron Tchwella, CEO, BluePhoenix Solutions. "Knowledge management modernization is growing at a fast pace. DSKnowledge is the de-facto leader in Israel with customers including El Al Airlines, Visa, Orange, Bezeq, Yes Cables, Hot cables and DHL among others. We believe that our global sales force will enable us to expand the reach outside of Israel to additional enterprises around the world."

Under the terms of the agreement, BluePhoenix will acquire the Business for approximately $3.7 million of which BluePhoenix may, at its sole discretion, pay approximately $1.8 million in BluePhoenix shares and will assume liabilities of approximately $1.2 million. In addition, BluePhoenix may pay additional consideration based upon the future performance of the Business.